Branson Set to Reap $316 Million in Sale of Virgin Media

Feb. 6 (Bloomberg) -- Richard Branson, the kite-surfing
entrepreneur who built a fortune starting from a London record
store, stands to reap $316 million from the buyout of U.K. cable
operator Virgin Media Inc. by John Malone’s Liberty Global Inc.

Branson, who is worth more than $5 billion based on the
Bloomberg Billionaires Index, owns 6.6 million Virgin Media
shares through RBC Trusts and Virgin Entertainment Investment
Holdings, according to data compiled by Bloomberg. Liberty
Global agreed today to buy the company for $16 billion, paying a
24 percent premium to Virgin Media’s closing price on Feb. 4.

For Branson, 62, the $47.87 price represents an extra $61
million in two days. His Virgin Group Ltd. empire ranges from
airlines to mobile phones to financial services. Virgin Media
was created in 2006 when he merged his Virgin Mobile U.K. into
NTL: Telewest to offer pay-TV, broadband, fixed-line and mobile-phone services. Branson started Virgin Mobile in 1999.

The London-born billionaire began building a music empire
as a young man by selling records at prices that undercut chain-store competitors. He started Virgin Records in the early 1970s.
The label handled punk bands including the Sex Pistols and
brought reggae music to a wider audience.

Branson later founded Virgin Atlantic Airways and other
airlines, as well as Virgin Mobile and a U.K. rail company. He
also joined the privately funded space race, and his Virgin
Galactic is now taking bookings for $200,000 “Pioneer
Astronaut” sub-orbital flights. He’s known for poking fun at
the stodginess of British Airways and for funding and
participating in humanitarian efforts, particularly in Africa.

Necker Island

Branson, a sports fanatic who has maintained a long-haired
blond surfer-dude look into his 60s, lives at times on Necker
Island, a Caribbean outpost he owns. When working, he often
keeps a pair of scissors in his pocket to cut people’s ties off.

Through a spokesman, Branson declined to comment on the
Virgin Media sale. The company is run by Chief Executive Officer
Neil Berkett, who joined the company from NTL and will step down
after the Liberty Global deal closes. Berkett, who joined the
company from NTL, said today on a conference call that he’s
“not a very good No. 2.”

Shares of Virgin Media, which is based in New York and
operates in the U.K., dipped 1.6 percent to $44.89 at the close
in New York. They advanced 18 percent yesterday after the
company said it was considering a transaction and have risen 22
percent this year.

Stock Drop

Liberty Global, based in Englewood, Colorado, fell 2.7
percent to $66.06 at the close in New York. The Class A shares
have added 4.9 percent this year.

Under the agreement announced today, Liberty Global will
pay $17.50 cash, plus 0.2582 share of its Series A stock and
0.1928 share of its Series C stock for each Virgin Media share.
Cable billionaire John Malone, Liberty Global’s chairman,
controls 36 percent of the voting power through his ownership of
Series B stock.

Liberty Global will also assume debt that brings the total
value of the transaction to $23.3 billion, according to a
statement from the companies today.